Paul Krugman: "We Should Kick The Can Down The Road. It’s The Responsible Thing To Do"

Tyler Durden's picture

The below article, recreated in its grotesque entirety, is a real, serious Op-Ed written by a supposedly real, non page-view trolling, Nobel-prize winning economist, in a serious paper, the New York Times. It can be classified with one word: jaw-dropping.

We can only hope that some time in the next five years, when the global economy is in ashes following the implosion of the final central bank bubble, that the US department of injustice will prosecute authors of such drivel (and all those sell-side analysts who have had Buy recommendations in the 2009-2013 period) with the same ferocity it has demonstrated toward those US-downgrading rating agencies, which are now supposed to be solely accountable for the Second Great Depression and the $30 trillion or so in misallocated capital in the past five years.

Kick That Can

By Paul Krugman

John Boehner, the speaker of the House, claims to be exasperated. “At some point, Washington has to deal with its spending problem,” he said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”

Actually, Mr. Boehner needs to refresh his memory. During the first decade of his time in Congress, the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in. It was only when George W. Bush arrived and squandered the Clinton surplus on tax cuts and unfunded wars that the budget outlook began deteriorating again.

But that’s a secondary issue. The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road.

Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.

This really isn’t a debatable proposition at this point. The contractionary effects of fiscal austerity have been demonstrated by study after study and overwhelmingly confirmed by recent experience — for example, by the severe and continuing slump in Ireland, which was for a while touted as a shining example of responsible policy, or by the way the Cameron government’s turn to austerity derailed recovery in Britain.

Even Republicans admit, albeit selectively, that spending cuts hurt employment. Thus John McCain warned earlier this week that the defense cuts scheduled to happen under the budget sequester would cause the loss of a million jobs. It’s true that Republicans often seem to believe in “weaponized Keynesianism,” a doctrine under which military spending, and only military spending, creates jobs. But that is, of course, nonsense. By talking about job losses from defense cuts, the G.O.P. has already conceded the principle of the thing.

Still, won’t spending cuts (or tax increases) cost jobs whenever they take place, so we might as well bite the bullet now? The answer is no — given the state of our economy, this is a uniquely bad time for austerity.

One way to see this is to compare today’s economic situation with the environment prevailing during an earlier round of defense cuts: the big winding down of military spending in the late 1980s and early 1990s, following the end of the cold war. Those spending cuts destroyed jobs, too, with especially severe consequences in places like southern California that relied heavily on defense contracts. At the national level, however, the effects were softened by monetary policy: the Federal Reserve cut interest rates more or less in tandem with the spending cuts, helping to boost private spending and minimize the overall adverse effect.

Today, by contrast, we’re still living in the aftermath of the worst financial crisis since the Great Depression, and the Fed, in its effort to fight the slump, has already cut interest rates as far as it can — basically to zero. So the Fed can’t blunt the job-destroying effects of spending cuts, which would hit with full force.

The point, again, is that now is very much not the time to act; fiscal austerity should wait until the economy has recovered, and the Fed can once again cushion the impact.

But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders.

Still, even if we should put off spending cuts for now, wouldn’t it be a good thing if our politicians could simultaneously agree on a long-term fiscal plan? Indeed, it would. It would also be a good thing if we had peace on earth and universal marital fidelity. In the real world, Republican senators are saying that the situation is desperate — but not desperate enough to justify even a penny in additional taxes. Do these sound like men ready and willing to reach a grand fiscal bargain?

Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.

So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.

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IridiumRebel's picture

Bring him here for debate and lets verbally kick his can from the awesomeness of the posters here who would send him packing!

Muppet Pimp's picture

A lttle pain now or a lot of pain later?  A knee scrape now or a leg amputation later? Time to take our medicine.  Bring it.

Krugman wants it to get so bad we have EU style riots in our cities when the moochers find out they were lied to.  Lets nip this thing in the bud and get back to being Americans.

francis_sawyer's picture

People... Keep reminding yourself that Krugman is simply a 'treasonous non-human' [nothing more ~ nothing less]...



Strikingly remarkable how many 'treasonous non-humans' have popped up since 1913 [& were largely involved in BULLDOZING 1913 into reality in the first place]... The world is full of quirky suprises...

a growing concern's picture

What if Krugman is a sly conservative who's just been portraying a ridiculous caricature to troll people all this time?  One day he'll go on TV and slap his knee and say he was just bullshitting us for the past several decades.  That'll piss off those Nobel assholes for sure.

HoofHearted's picture

I would like to kick Krugman down the road...

tsx500's picture

Krugman wouldn't know responsibility if it came up and kicked him in the head  !

francis_sawyer's picture

 "Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts...

So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do..."


Translation: I'm a goddamned priviledged ass mother fucking JEW sitting in an ivory tower that wouldn't know a ledger from a fucking garden hoe...

Instead ~ all I know how to do is to come up with candy ass motives to keep the jew motherfucking paper ponzi going for as long as possible so I can continue to accrue champagne, caviar, & gefilte fish to my dinner table [on the backs of all the "pigs" (who ACTUALLY WORK) out there] until they put me in the grave... If I happen to live long enough, then your KIDS will have to sweat for me too...

It's my birthright because I count myself amongst THE CHOSEN... The rest of you can just fuck off because my TRIBE will back me up on this...

Tinky's picture

It's a shame that your useful points are so often degraded and/or obscured by the fog of hysterical anti-semetism.

francis_sawyer's picture

It's a shame that so many people, [besides not knowing how to spell 'antisemitism'], have ZERO grasp of what it's all about or WHY [or by WHOM] the term came into use in the first place...

TuesdayBen's picture

The reason Krugman looks deranged is that Krugman is deranged.

Richard Chesler's picture

"I refuse to grow up" - Paul Krugman.

Fucking idiot.


Texas Ginslinger's picture

He's obviously been eating horse meat for a very long time...

Thomas's picture

He's a total boob who had few friends as a kid.

Divided States of America's picture

If you happen to be walking down a street with your buds and you bump into the 'venerable' Paul Krugman, this is what should be going out of any sane person's mind.

"We Should Kick the Shit out of him. It's the Responsible Thing to Do"

EscapingProgress's picture

Krugman is a political hack, not an economist.

jeff montanye's picture

well, it would have been better if there had not been a ten trillion dollar debt already when the crisis struck in 2008, no?  then we'd have a six trillion dollar debt now instead of a sixteen trillion dollar one.

(not spent on the right things and hardly any banksters in jail but that's another story)

save in times of plenty, spend in times of famine.  watchwords of the competent bronze age prince.

Tinky's picture

Yes, I misspelled the word. And, of course, you know full well what the broad, accepted understaning of the expression is.

So, to summarize the exchange, I misspelled a word, and you are a blatant anti-semite whose legitimate expressed views are degraded as a result.

francis_sawyer's picture

A 'caste system' [which regards themselves as CHOSEN ONES], are the ultimate 'DE-GRADERS' of society at large...

Tinky's picture

Just as you absurdly paint all of those of one faith with a broad brush, you also utterly fail to consider that "chosen ones" means very different things to all Jews. Inconveniently for you, the vast majority do not consider it to be some kind of license for special privilege (as you imply), but rather as additional responsibilities.

I'm beginning to suspect that your family's original name was Moronski.

Divided States of America's picture

If it talks like a Krugman and prints like a Bernanke, by god, its definitely a JEW!

john39's picture

Doesn't really matter how one interprets being 'chosen', either benefit or burden the result is seeing your group as somehow different than others. This simple lie has been the source of untold suffering for so called Jews and non Jews alike. A bit of basic common sense would reveal the origin and purpose of the lie... Mind control.

TWSceptic's picture

Antisemitism, anti-semitism or anti-Semitism are all accepted ways to spell the word, so he was wrong. I also agree the valid views on this site are degraded by the antisemitism.

MedTechEntrepreneur's picture

Poor Sawyer...he hates getting outsmarted by the Jooo's so he hates.  It's a lot like the Great White Hope, getting his ass kicked yet again by the black lets call them Nigga!

Raymond Reason's picture

If you're equating 'smart' with cunning, the Joos probably have Francis beat.  My guess is Francis doesn't aspire to be cunning or sly, on the contrary, he is willing to voice his honest perceptions, which of course raises the ire of those related to the cunning ones. 

Good for you, Francis, for not being shamed away from your perceptions. 

asteroids's picture

Fucking selfish coward. Willing to fuck his kids and grandkids so he can live an easy life. Instread of standing up like a man and doing what needs to be done to fix the economy. Sure it'll means hard years and sacrifice, but, like generations before him, he'll take the easy way out. What a pig.

fockewulf190's picture

It's like saying "Yeah, we're addicted to fiscal meth, but we aren't at the point yet of clawing our faces off, and the dopamine is doing a great job...and we need those fiscal meth lab jobs to keep our economy going! One day we will all turn into mindless zombies, but we can find new industries in the booming rehab and crack house restoration markets and enjoy the new cyclical upturn. Nevermind that giant pile of cadavers, thats just birth-death. Nothing to see here.

unrulian's picture

Aww common...there's no way an educated human can be that fucked....that haaassss to be sarcasm....i think krugman is MDB...that's the only way it can make sense.

Cap Matifou's picture

Krugman exactly knows what our main problem is, and he chooses to write shitty articles for the peasants instead of doing something about it. His advice to his fellow graduate, about how to reach great fame in this shitpile we call economics:

Didn't they tell you, reform whatever you want, just never touch the money system!

CompassionateFascist's picture

tr: don't touch the Rothschilds. Even Hitler got that message: Redshields all over Europe, 1940-45. Not one got stood up and shot or shoved into a GC. Not one. Quite a coinkydink. 

A Nanny Moose's picture

That would be an insult to cans.

By Kruggybear's logic $16T in debt should have prevented all recessions since Andrew Jackson.

Skateboarder's picture

ATTN: Can Kicking to debut at the 2016 Olympics. Tryouts start Jan 2016 at top three business schools of your country. MBA required to participate, BAR certification preferred.
This message brought to you by Central Banks, LLP

TuesdayBen's picture

It will be a sweep for the USSA - Obama (doing a black power raised fist to try and look like an African American), Bernanke, and Krugman on the medals stand. They all opt for non-precious-metal medals in a show of Solidarity. President Paul denies all re-entry, declares them enemies of the state. They are taken in by Zimbabwe.

juslen's picture

You mean one of those nationalist conservatives that wants to slash taxes but refuses to cut spending? I like to call those types of conservatives idiots.

Matt's picture

But what if it were possible to cut taxes, increase spending, and reduce the national debt?

"Today, by contrast, we’re still living in the aftermath of the worst financial crisis since the Great Depression, and the Fed, in its effort to fight the slump, has already cut interest rates as far as it can — basically to zero. So the Fed can’t blunt the job-destroying effects of spending cuts, which would hit with full force."

It seems Mr Krugman is unaware of NEGATIVE INTEREST RATES. The Fed could use QE to turn interest rates on US Debt negative. The Treasury could isue more debt at negative rates, reduce tax rates, and increase spending.

But wait! I know you're thinking, "wouldn't the federal reserve lose money buying treasuries at negative rates and holding them to maturity?

Easy. As the supply of USD increases, it's value in gold decreases (or, to put it another way, the price of gold in dollars increases). The Federal Reserve would simply need to buy gold at the same time as it buys government bonds at negative rates. The increase in the price of the gold will balance out the losses from earning negative interest on the treasuries.  

CompassionateFascist's picture

When will the Jews stop their incessant Ponzi-scheming?

eatthebanksters's picture

Krugman is a socialist with a socialist agenda...until he and his friends burn down our system he cannot have his perfect world...he wants to destroy anyone with wealth without imploding the system...if we fix the problems with the discipline that runs counter to his core premise, it will serve to strengthen our capitalist system...not what this asshole wants. He is further proof (along with Obama and Gore) that the Nobel Prize is awarded to meaningless bigots and is a joke.

Fredo Corleone's picture

A similarly opprobrious character from the annals of history bears a strong resemblance to the Nobel Laureate:

Grigori Rasputin


The difference is that Rasputon could take a punch, and a few shots, poison and stabbings.

Krugman would fold the minute you pulled on his beard


caconhma's picture

People, stop usingnames you know nothing about.

Rasputon was a good man who tried to keep the Russian Empire from the WWI. This is exactly why he was murdered by British agents.

Peter Pan's picture

It appears that Krugman was an only child. Thankfully his parents exercised damage control although it came a little late.

caconhma's picture

Here we are going again: Great Krugman.

Let me repeat one time more: Krugman never got a real Nobel Prize but instead he got a "look alike Nobel Prize" rewarded by a Swedish Central bank. So, they, Central bankers, are paying and he is playing their favorite music.

For God sake, why are we discussing Krugram instead of "Lady Gaga"? At least, we know she is an ugly pervert. As for Krugman, we don't know whether he is sleeping with his mother or not but his religion promotes filth and dishonesty.


WhiteNight123129's picture

Here is teh deal boys and girls.

Austrians and Keynesians agree on one thing, when you have too much bad debt to GDP, get rid of it.

Austrian method is wack bad credit and restore credit to base money ratio.WACK THE NUMERATOR

Problem is wealth effect and for a while people do not spend their base money (Gold).

Keynesian is wack currency by printing a lot of money and shrink credit by EXPANDING THE DENOMINATOR.

Either way debt to base money is shrunk.

There is a tricky part in teh Keynesian remedy, which is totally counter intuitive, as you print a lot of fuel logs (paper money) you need the Gov to throw a match in the newly printed currency so that the economic fire burns.

Once inflation is humming along nicely and people are therefore force to spend the newly printed money, Gov can reap the benefits of higher nominal tax revenues. If it costs 20% to buy a cabbage, nominal sales taxes rise 20%. And VOILA. Inflate away explained.

Rising long bond yields also means higher nominal taxes. That is where some are wrong they think that the long bond yield rises without inflation and without higher nominal taxes.... Keynes is wicked but inflating away always works. Ah the holders of the currency get fucked. Who cares?


Arrowflinger's picture

Exactly. In the red states the deceivers have fired up the notion of the so-called "fair" tax - a national sales tax. For middle class folks to buy into a 30% tax on services, including government services, and goods means compounding the inflation/monetization tax.

That was a great point and one that a lot of folks have missed.

ATM's picture

He's not a socialist, he's an Authoritarian. He wants nothing more than the total destruction of personal Liberty to be replaced by Centrally Planned Hell.

Fuck you Krugman. If I ever meet you face to face I will punch the shit out of your hairy little melon. 

NumberNone's picture

Krugman and his ilk have spent the last 40 years getting the US hooked on the free money equivalent of booze and drugs.  Now that we are realizing the habit is going the kill us, they are playing the role of the typical drug dealer they want to keep us hooked.  Can't let our death ruin all the fun they are having at our expense.  Fuck these guys.   

NemoDeNovo's picture

Krugman is INSANE in his own Membrane, but hey why not Party like its 1999!  Right?